A business line of credit (LOC) gives your business access to a credit limit that you can draw from as needed. You typically pay interest only on the amount you use, making it a flexible option for businesses that want on-demand liquidity without taking a full lump sum upfront.
A business line of credit is a revolving financing tool. Instead of receiving one lump sum, you have a credit limit available to draw from, repay, and reuse—similar to how a credit card works, but typically with different underwriting, limits, and repayment structures.
Business line of credit terms differ significantly between lenders, so carefully review repayment schedules, interest rates, fees, and renewal policies.
Lenders determine your credit limit based on cash flow, credit profile, business age, and guidelines.
Access all or part of your approved limit when needed for operational or seasonal business needs.
Repayments restore available credit, providing ongoing access for your business’s future financial needs.
Flexible funding for managing cash flow gaps, seasonal needs, and ongoing operational business expenses.
Approved based on cash flow and credit profile, offering flexible access without collateral, though credit limits are typically lower.
Backed by business assets or collateral, often allowing higher credit limits, improved pricing, and more favorable repayment terms.